NEW REGULATORY FRAMEWORK MAY INCREASE GRAIN FLOW IN CEARÁ PORTS AND REDUCE FREIGHT PRICES

The new railroad regulatory framework approved last week by the Chamber of Deputies is expected to increase the flow of products, mostly grains, in the ports of the state of Ceará (Pecém and Fortaleza), on top of generating cheaper freight costs and bolstering projects such as the Transnordestina railway. The Brazilian Federal Government expects R$ 80 billion to be added into the railway sector in the country, causing a decrease of nearly 40% in freight prices as a response to the decrease in dependence on road modal that would shortly follow. According to Augusto Fernandes, CEO of JM Négocios Internacionais, the majority of investments would be directed to the South-Southeast axis of Brazil given that these are the regions where most of the consumer market and firms are located at. Notwithstanding, Fernandes believes that the state of Ceará and the Northeast region altogether could still benefit from the new framework whatsoever. Among possible benefits, he mentions the increase in the flow of products at Pecém and Fortaleza.

Sources: Diário do Nordeste/Datamar News